Economics of cold storage industry in eastern district of Uttar Pradesh

Abstract

Cold storage units were categorized into small, medium and large categories on the basis of their capacities. It was
observed that 77.44 per cent of total capacity was used exclusively for potato and rest was used potato seeds and
other perishable commodities. Net returns were nearly at par for medium and large units i.e. Rs. 498.73 thousand and
Rs. 428.83 thousand respectively and higher as compared to small units, which were Rs. 390.18 thousand. Break even
quantity (BEQ) as percentage of actual quantity was 44.51 per cent for small, 52.47 per cent for medium and 65.61
per cent for large units. Payback period was about 10 years and ranged from 7 (small units) to 14 (large units). The
capital-output ratio was found to be the highest for small units as compared to medium and large units i.e. 1.48, 1.37
and 1.22 respectively. The most prominent problems faced by the industry were the increase in electricity charges and
non availability of finance throughout the year. So that the investment in the cold storages fetched proportionately
less benefit. However, their profitability can be enhance through the government intervention by decreasing
electricity charges, providing finance throughout the year, low interest rate on borrowed capital and adequate supply
of electricity.